How to Determine Franchise Royalties
Setting the right percentage is a balancing act.
When designing a franchise, it is tempting to set high royaltiesto generate maximum income from franchisees. However, settingroyalties is a balancing act. You want a fair financial return, butif you set royalties too high, the financial burden may meanfranchisees can't compete with other businesses. If thathappens, you will wind up with less in the end.
Excerpted from Grow Your Business